Another set of tariffs on China supporting the U.S Dollar early on, with the RBA meeting minutes failing to give the Aussie Dollar a boost.
Economic data released through the Asian session this morning was limited to 2nd quarter house price figures out of Australia, with the RBA meeting minutes from the 7th September meeting released alongside.
For the Aussie Dollar:
House prices fell by 0.7% in the 2nd quarter, which was better than a forecasted 1% slide, while the rate of decline was the same as in the 1st quarter, where prices also fell by 0.7%. According to figures released by the ABS:
The RBA meeting minutes had a positive undertone, in line with the RBA statement released at the time of the interest rate decision, while concerns over the possible effects of the U.S – China trade war on the Australian economy tempered any Aussie Dollar rally. Salient points from the minutes included:
The Aussie Dollar moved from $0.71658 to $0.71724 upon release of the stats and the RBA meeting minutes, before easing to $0.7169 at the time of writing, down 0.18% for the session, the risk off sentiment pinning the Aussie Dollar back through the morning.
Things were a little better for the Kiwi Dollar, which was down 0.0.5% to $0.6575, with the Japanese Yen down 0.04% to ¥111.9 against the Dollar, the go to currency as trade war tensions build.
In the equity markets, it was another mixed bag at the time of writing, the Nikkei up 0.83%, supported by the Yen hovering at just shy of ¥112 levels and the CSI300, which was up 0.09%. The Hang Seng and ASX200 were in the red, down 0.5% and by 0.24% respectively, fresh tariffs on $200bn worth of Chinese goods kicking in next week and an overnight slide in the U.S equities doing the damage. For the ASX200, the upbeat tone in the RBA meeting minutes eased some of the pain, though concerns over the ongoing trade war between the U.S and China will have limited any major rally, falling commodity prices and the tech sector weighing. On the Hang Seng, Tencent, Sunny Optical and AAA Technologies were amongst the heaviest fallers again in the early part of the day.
For the EUR, there are no material stats scheduled for release through the European session, leaving the EUR in the hands of trade war chatter and ECB President Draghi, who is scheduled to speak later this morning.
Any hawkish chatter could see the EUR spike, though Draghi may be looking to limit the upside in the EUR as trade tensions continue to keep central banks on high alert.
At the time of writing, the EUR was down 0.02% to $1.1681, with trade chatter and Draghi in focus through the day.
For the Pound, there are no material stats scheduled for release, leaving the Pound firmly in the hands of Brexit chatter, judgement day approaching for Theresa May, her Chequers plan and possibly her position at the top, this week’s EU Summit considered a last chance saloon for May to garner individual member state support.
At the time of writing, the Pound was down 0.06% to $1.3149, with Brexit the driver for the day.
Across the Pond, there are no material stats scheduled for release through the U.S session, leaving the markets to consider the Redbook numbers due out in the early part of the afternoon and noise from the Oval Office, Trump wielding the trade war stick with purpose following the announcement of fresh tariffs on $200bn worth of Chinese goods that will kick in next week and increase next year.
At the time of writing, the Dollar Spot Index was up 0.07% to 94.56, with direction in the hands of Trump through the day.
For the Loonie, stats are limited to July manufacturing sales figures, which will provide some direction for the Loonie, albeit temporary, with focus remaining in NAFTA talks as Canadian Foreign Minister Freeland prepares to head back to DC to resume talks with the U.S administration.
At the time of writing, the Loonie was down 0.07% to C$1.3052 against the U.S Dollar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.